Young entrepreneurs missing in action: ASBFEO

Profession

24 August 2023

Philip King

young entrepreneurs missing in action asbfeo

Need to know

With the Intergenerational Report due today, the ombudsman finds the small business sector faces its own demographic challenges.

A generation of young entrepreneurs has gone missing in action with the average age of small business owners halving since it peaked in the mid-1970s, according to research by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).

Just 8 per cent of small business owners are now under 30, ASBFEO analysis of ABS data reveals, and over-50s have become the largest age contingent at 47 per cent.

Ombudsman Bruce Billson said the most common age of small business owners across Australia was now 50 years, compared to 45 years in 2006.

“In the 1980s there were actually twice as many small business owners aged between 30 and 49 as there were aged over 50,” Mr Billson said.

“The Intergenerational Report being released by the Treasurer this week highlights the ageing of the population and the quest to make our economy larger to meet the challenges and opportunities of the future.

“Small business, which accounts for 97 per cent of all businesses and provides jobs for over 5.1 million people and employs 42 per cent of all apprentices and trainees, stands at the epicentre of this mission and energising enterprise will help deliver the growth to meet future needs.

“But the small business sector faces its own demographic challenges with only 8 per cent of small business owners aged under 30. It is half the peak for this age group of 17 per cent achieved in the mid-1970s.”

Mr Billson said in some sectors youthful ownership was even lower. In the retail industry, just 6 per cent of small business owners are aged under 30 while in financial and insurance services the figure was only 3 per cent.

“We need to replenish and nurture the next generation of entrepreneurs, value self-employment and encourage and enable smaller enterprises and the livelihoods they make possible,” Mr Billson said.

“We need to understand why it is not as appealing as it perhaps should be for younger Australians to own a small business?”

Until recently, the 30-49 age group dominated small business ownership, peaking at 59 per cent in the early 1990s. But the analysis showed more than one in five small business owners (22 per cent) were now aged 60 and over.

Older owners dominated some sectors, with two-thirds of agriculture, forestry and fishing small businesses owned by people over 50.

Other sectors with more than 50 per cent of small business owners aged 50 or over included manufacturing, retail, finance and insurance, real estate, wholesale trade, utilities and waste services.

About the author

Philip King

Philip King is editor of Accounting Times, Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors. Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines. You can email Philip on: [email protected]